DUBAI, Oct 28 (Reuters) - Kuwait Investment Authority (KIA), the Gulf state’s sovereign wealth fund, has appointed a head for its newly-created infrastructure arm, seeking to bolster its investments in the sector, two sources familiar with the matter said.

Hakim Drissi-Kaitouni, previously a vice president at Bank of America Merrill Lynch in London, has joined as a managing director of Wren House Infrastructure Management, a fully-owned unit of KIA, the sources said, speaking on condition of anonymity as the matter is not public.

The Wren House arm, which was set up in April by the wealth fund and housed under its London-based Kuwait Investment Office (KIO), also hired Marc Keller, another BofA Merrill banker, to assist Drissi-Kaitouni in identifying investments in the sector, one of the sources said.

Both KIO and BofA were not immediately available for comment.

Sovereign wealth funds in the Gulf Arab region, which hold about $2 trillion in assets, are beefing up their infrastructure investments, lured by stable returns and seeking to diversify their investment portfolios which have been traditionally heavy on equities.

The Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, hired John McCarthy, a senior Deutsche Bank AG executive to head its division that handles global infrastructure investments, it said in May.

KIA’s unit will initially look for infrastructure investments in Britain, and plans to slowly spread its wings to elsewhere in Europe and other global opportunities, the first source said.

KIA, which has estimated assets of between $300-$400 billion, was part of a consortium that bid for British water company Severn Trent earlier this year but the parties walked away in June after the company refused to engage in talks before a bid deadline expired.

The fund has more than doubled its investment in Britain over the past 10 years to over $24 billion, Bader Mohammed al-Saad, managing director of KIA said in June.

The KIO arm manages more than $120 billion globally compared with only $27 billion 10 years ago, al-Saad said at the time.